I doubt that there will be any disruptive technologies to change the utilities in my lifetime. By investing in an exchange traded fund (ETF) consisting of a basket of utilities you will have a safe bet on energy. Utilities Select Sector SPDR (XLU) includes electric utilities, multi-utilities, independent power producers, energy traders and gas utilities.
You'll own companies such as Exelon Corp. (NYSE: EXC) a utility services holding company, Southern Company (NYSE: SO) who uses subsidiaries in the generation, transmission, distribution and sale of electricity, Dominion Resources, Inc (NYSE: D) a provider of electricity and natural gas to the eastern United States, and Duke Energy Corp. (NYSE: DUK) an energy company in the Americas. XLU also gives you a diversified basket of dividend paying stocks. Over the past year, XLU has paid about $1.20 which is currently a 4.3% yield on a $28 stock which down 33% this year (which means your dividend yield is higher). That's a lot better than 10 year T-Bills and the stocks in this index could appreciate as well.
For only a 0.23% fee, you're paying a computing system to select a basket of the top utilities -- more cost effective than a traditional money manager trying to select the best ones and charging you a 1.5% management fee (eating up about 1/3 of your dividend!). Listed below is a list of the current to 10 holdings of XLU.
| Holding Percent | Company | |
| 4.09% | AMER ELECTRIC POWER (NYSE: AEP) | |
| 6.78% | DOMINION RESOURCES (NYSE: D) | |
| 5.56% | DUKE ENERGY (NYSE: DUK) | |
| 4.66% | ENTERGY (NYSE: ETR) | |
| 11.25% | EXELON CORPORATION (NYSE: EXC) | |
| 5.58% | FIRSTENERGY (NYSE: FE) | |
| 5.62% | F P L GROUP (NYSE: FPL) | |
| 3.8% | PPL (NYSE: PPL) | |
| 4.56% | PUB ENTERPRISE (NYSE: PEG) | |
| 7.94% | SOUTHERN (NYSE: SO) |
Mitch Tuchman founded MarketRiders, an investment website teaching individuals how to save on fees and be their own investment advisor using low cost ETFs and asset allocation.










